It's unquestionable that e-commerce is big business. In 2015, e-commerce sales reached $341.7 billion, a 14.6 percent increase from 2014, reports the Census Bureau of the Department of Commerce. But as more people shop online, the customer experience bar continues to rise.
To continue driving sales, retailers must align shopping tools and experiences with their customers' needs. Here, we look at sales tools that are poised to transform the retail landscape.
From buy buttons to smart mirrors, retailers have a plethora of sales tools at their disposal. It can be tempting to experiment with as many new platforms as possible, but retailers should think strategically, notes Nikki Baird, managing partner atRetail Systems Research.
"The challenge for retailers is to resist the urge to use new or enhanced touchpoints in primarily a promotional way, instead of thinking about how to help customers solve problems," Baird says. "If the retailer's objective is to sell more stuff, then they risk implementing the technology in a way that annoys consumers and kills their willingness to use it." Retailers can avoid this pitfall and ultimately drive sales, Baird adds, if they implement new features with the objective of solving a customer's problems.
Messaging platforms, for instance, have made it extremely easy for people to quickly communicate. In fact, text messages have outranked phone calls as the dominant form of communication among Millennials since 2014, according to a Gallup poll. As more people spend time on messaging platforms, they are becoming a central platform for a growing number of tasks. In China, users buy movie tickets on messaging platform WeChat, as well as play games and shop on it.
Unsurprisingly, companies are eager to join those conversations and help more consumers find and purchase products on messaging platforms. Enter conversational commerce. While consumers are already familiar with live chat on a website, tech firms are taking the service one step further by helping retailers sell products via mobile messaging and SMS.
Through a combination of human and artificial intelligence, SMS-based services like Magic and GoButler enable users to send a text to an "assistant" to order food, send flowers, or have groceries delivered to their door.
And in February, e-commerce platform Shopify released an iOS keyboard app called Shopkey, that lets retailers sell products on social media and messaging apps. The app imports the retailer's product catalog into a text message on a smartphone, allowing consumers to search the catalog and click a link to buy a product. Additionally,Shopifyis building commerce bots for Facebook Messenger, a project that will allow merchants to have more conversations with customers.
Using Shopkey, a shopper could ask a retailer via text message to recommend a blazer that complements a blouse. The associate behind the retailer's account can search through the product catalogue and quickly insert photos and links of blazer options into the conversation, which the shopper can click to buy.
"Because it's so easy to leave a site or close an app, online retailers have to give shoppers really compelling reasons for them to stay," Loren Padelford, general manager and chief sales scientist at Shopify, notes. "And that includes removing barriers to making a purchase or making it easier for people to find an answer to their question."
In other words, if consumers are texting more than ever, why not let users shop and pay bills via text instead of sending them to another platform? Indeed, "conversational commerce is about delivering convenience,personalization, and decision support while people are on the go, with only partialattention to spare," writes Chris Messina, the former Googler credited with inventing the hashtag, in a blog post.
But retailers must overcome significant hurdles before conversational commerce becomes a mainstream practice. Retailers have to sync their product catalogs, order management, and payment systems with the messaging app or vendor to make sure they're processing orders in a timely manner. Companies must also convince consumers to adopt a new buying behavior.
Buy buttons face similar hurdles. In a report, Forrester Research analysts Andy Hoar and Sucharita Mulpuru note that buy buttons won't change e-commerce-yet. "While the idea of major sites like Pinterest and Google capturing sales on mobile devices is enticing, the truth is that the user interfaces necessary to easily facilitate those transactions aren't here yet," Hoar and Mulpuru write.
The Next Wave of Personalization
Many retailers have identified curated e-commerce and personalized online shopping experiences as a priority. One example is French cosmetics company Lanc?? which is simplifying the online shopping experience with the launch of a new site.
Last week, Lanc??/a> announced it had updated its online store to better match the assistance consumers receive at its physical makeup counters. The company implemented the Edgecase Product Intelligence Platform to help shoppers find the products they're looking for faster.
Edgecase's technology tracks shoppers' browsing behaviors and keyword searches on Lanc??s site to better understand what types of products a shopper is looking for.The vendor then leverages the insights data to determine which products to display at the top of a landing page. For example, with this new layer of product data, Lanc??s shoppers can now shop by using terms like "skin tone" or "hypoallergenic" when browsing the site.
In addition to updating the search functions of its site, Lanc??has added other functionalities to make the online experience as similar as possible to shopping in person. Two years ago, the retailer began letting consumers see what a product will look like on a similar skin tone with a cloud-based visual commerce tool. The tool allows consumers to select a model that is the closest to their skin color and then see how products would look once applied.
"We are constantly looking for ways to ensure we align our shopping experiences with our customers' needs, particularly when it comes to our online store," says Kristopher Jean, director of digital strategy and e-commerce at Lanc?? in a statement.
Retailers in Southeast Asia like Zalora, an online fashion retailer, are also investing in personalization, albeit at a different pace compared to their Western counterparts. Headquartered in Singapore, Zalora sells clothing and footwear to shoppers across Southeast Asia. The maturity level of e-commerce markets varies widely across Southeast Asia with some consumers still becoming familiar with the concept of online shopping, explains Patrick Steinbrenner, regional director at Zalora Group.
While Singapore's online market is relatively advanced with high Internet penetration, other countries such as Thailand, Vietnam, and the Philippines lack the delivery infrastructure and Internet penetration necessary for e-commerce businesses to thrive.
"In some countries the online channel contributes less than 1 percent of revenues in retail, which highlights the immense opportunity Zalora faces," Steinbrenner says. These countries aren't going to remain laggards for long though as more brands and companies enter the e-commerce market. As more people in Southeast Asia turn to online shopping, Zalora is betting on personalization to win their loyalty. "Personalization allows us to take the next step by making the first, second, third, etc., e-commerce experience a lot more relevant and hence more enjoyable," Steinbrenner maintains.
So far, Zalora's "biggest wins," according to Steinbrenner, include personalizing pop-up messages that the company created with help from Evergage, a personalization software provider.
When it appears that a shopper is about to close the page or enter another search term, such as when the cursor moves toward the browser bar, a pop-up message appears. The messages offer deals that are personalized based on the customer's lifecycle or what's in her shopping cart and are further localized to the region and user's preferred language.
Steinbrenner declined to share the number of sales that can be attributed to the personalized messages, but noted that compared to generic messages, the customized messages have helped the company "significantly increase lead gen while sustaining conversion rates."
As companies like Zalora and Lanc??demonstrate, experimenting with new technologies and features is necessary to stay ahead of competitors but businesses can't lose sight of the customer. Focusing on what companies can do to better serve their customers-not on the solutions themselves-will ultimately have the greatest impact.